Monday, June 25, 2012

Zach Parise Contract: Kovalchuk Framework?

Media and speculation have the Minnesota Wild preparing to offer Zach Parise a lifetime contract, that will make him one of the highest paid players in the NHL: For instance, this one from Wild beat writer, Mike Russo:

Parise made $6 million this past season, but the Wild, the lowest-scoring team in the NHL last season and desperate for a star, is expected to offer Parise as much as $8-9 million annually.

And then, this tidbit from Charley Walters (whose not known as a regular on the Wild beat):

If need be, the Wild would be willing to offer presumptive New Jersey Devils free agent Zach Parise from Minneapolis a 13-year guaranteed contract.

If it is me, I offer a seven year deal at about $8 million per. My guess? The Wild are ready to pony up more than that...10 years, $9 million per year.

The theme here seems to be $8 to 9m contract anywhere from 10 to 13 years.The range is very relevant because it will effect the eventual cap hit, the number that fans tend to remember and is important to big market clubs as they look to squeeze in as much as possible under the salary cap.

Of course, the cap hit is the annual average value of a deal. It can also be somewhat misleading, as it is possible for Parise for all intents and purposes, to make $9m per year yet have a ~$7m cap hit. Here is an example of such a deal that could be offered to Parise to get him to the total dollars he demainds while keeping the cap hit manageable for an NHL looking to max out their roster (at some point in Minnesota's case):

Essentially, what the above is is Ilya Kovalchuk's actual contract with the last three years lopped off. It would provide Parise with an average salary of $9m for the first 10 years. The last three years could be seen as "optional" years for him to either play through or even retire, given he'll be in his late thirties at that point. Considering his injury history and playing style, it's quite possible Parise will retire before those last years.

And then there is the strategy of front loading. That's when the contract provides the player to get much of the total dollars up front in the first few years of the contract, which is always a nice to have for anyone signing a contract. Russo believes the Wild are willing participants in such a deal:

The Wild, like others, have lots of salary-cap space. Maybe more than the Penguins, the Wild will have the ability to sweeten an offer with frontloaded money.

With some re-sorting of the above, we can make the same offer front loaded, as follows: